Telecoms Update January 2014

Welcome to the January 2014 edition of Telecoms Update, Fieldfisher’s publication which is targeted at advisers in the telecoms/ISP industries.

We start this issue by covering OFCOM’s provisional decision to reduce the donor conveyance charge (DCC) element of mobile number porting charges by over sixty per cent (from its current level of 0.1ppm to 0.039 ppm). In addition, OFCOM intends to disallow any HLR look-up costs and BT transit costs as part of the DCC. If this proposal goes ahead, it will mean that operators who are gaining market share through churn from their competitors will face lower costs to acquire customers who wish to port their mobile number as part of the switch. One potential consequence of this move is that certain operators who have broadly symmetrical churn rates may decide not to charge each other the DCC charge on the basis that the costs of setting up and running the associated systems outweigh any benefit to either operator.

The next article looks at recent decisions of the Competition Appeal Tribunal and the Competition Commission which clarify the grounds on which communications providers can challenge/appeal a decision of OFCOM. In the CAT decision, COLT had challenged OFCOM’s decision to implement a requirement on BT to offer various “active” wholesale services and not to impose passive infrastructure access (PIA) requirements on them. The Competition Commission determination followed an appeal by Verizon and Vodafone against OFCOM’s decision on the price control measures to be adopted for traditional interface services. Both cases led on from OFCOM’s March 2013 Business Connectivity Market Review and highlight the hurdles communications providers need to surmount before they can successfully overturn an OFCOM decision.

In addition, we review the European Commission’s proposed regulation that would scrap roaming fees by banning all charges for incoming calls within the EU after July 2014, and give operators an incentive to drop most other roaming fees altogether. This proposal forms part of the Commission’s “Connected Continent” legislative package which, in addition to the proposals on roaming, co-ordination of spectrum use and net neutrality, seeks to simplify regulation for operators, standardise fixed access products and improve a consumer’s ability to switch communications provider.

Next we review OFCOM’s confirmation of its proposals that all switches for fixed voice and/or broadband services over the Openreach network will be harmonised to a single gaining provider led process using the existing Notification of Transfer process. This will mean the removal of the current losing provider led based migration authorisation code process for broadband switching. The new proposals will require changes to be made to General Conditions 22 and 24 of the General Conditions of Entitlement.

Lastly, we cover the National Audit Office’s report into the Government’s rural broadband programme (Broadband Programme) which has demonstrated that only four out of the 44 regions covered by the Broadband Programme will have completed their roll-out programme by the target date of May 2015. The report was also highly critical of the procurement framework established for the Broadband Programme and indicates that the final delivery of the Broadband Programme will not occur until December 2016.